Greece struggling to convince creditors it’s for real

BRUSSELS (AP) — Greece’s finance minister was struggling late Saturday to convince skeptical creditors that the Greek government can be trusted to deliver on its reform promises in exchange for a financial rescue package securing the country’s future in the euro.

More than seven hours after they sat down to discuss Greece’s bailout request, eurozone finance ministers appeared likely to extend their meeting into the early morning hours as they negotiated over what additional measures the Greek government can take to win support.

In Finland, another hard-hit eurozone country, there were reports that the coalition government was balking at further assistance for Greece — a failure to give Greece a rescue package could see the country ‘s economy collapse.

The pressure has been on Greece all day even after the Greek parliament passed a harsh austerity package that it hopes will lead to a three-year bailout. Over and over, finance ministers and top officials of the eurozone said the same thing as they arrived for the key meeting in Brussels on Greece’s bailout proposals — we don’t fully trust you to make good on your promises.

Greece’s left-wing Syriza government, they said, needed to do a lot more than just publish a 13-page plan of reform commitments before they could sign off on another multibillion-euro bailout deal that would keep the country afloat and prevent its exit from the euro.

A European official at the talks said creditors want “more specific and binding commitments” from the Greek government.

The official, who spoke on condition of anonymity because he’s not authorized to talk publicly, says there’s a general feeling in the room that the Greek proposals are “too little, too late” and as such, more proof of the government’s commitment to follow through is required. The official said those pledges don’t “necessarily have to be austerity measures.”

That sentiment echoes much of the language in the run-up to the meeting.

“We are still a long way out, both on the issue of content as on the tougher issue of trust,” Jeroen Dijsselbloem, the eurozone’s top official, said on his arrival at the meeting. “On paper it is not good enough yet — and even if it is good on paper, then we still have the question: will it really happen?”

Greece is running out of time to convince its creditors. A Sunday summit of European Union leaders could be its last chance to prevent the collapse of the banking sector and an inevitable exit from the euro currency.

Greece’s banks have been shuttered for the better part of two weeks and daily withdrawals from ATMs have been limited to a paltry 60 euros. The economy is in freefall and the country faces a raft of big debt repayments.

Early Saturday, Greek Prime Minister Alexis Tsipras cleared one hurdle. Lawmakers in the Greek parliament overwhelmingly backed a package of economic reforms and further austerity measures, in the hope that it will convince its European partners to back a third bailout of the country. Greece has made a request to Europe’s bailout fund for a 53.5 billion-euro ($59.5 billion) 3-year financial package.

Still, the measures proposed, which include changes long-demanded by creditors, such as changes to pensions and sales taxes, don’t appear to be enough, just yet. Following months of deteriorating relations, creditors are demanding firm legislative action to back up the proposals.

Earlier, German Finance Minister Wolfgang Schaeuble, who has taken a hard line on Greece over recent months, said the Greek government will have to do a lot more than just say it wants to reform if it’s going to get more money.

“We will definitely not be able to rely on promises,” he said. “We are determined to not make calculations that everyone knows one cannot believe in.”

Schaeuble was clear in who he blamed for current crisis. He put that firmly on the shoulders of the radical left Syriza government that was elected in January on an anti-austerity prescription. The “hopeful” economic situation regarding Greece at the end of last year has been “destroyed by the last months,” said Schaeuble who anticipated an “extraordinarily difficult” meeting.

The German finance minister was at the center of a report in Germany’s Frankfurter Allgemeine Sonntagszeitung that he has proposed a temporary, five-year euro exit for Greece as a way out of the crisis. However, Theodoros Mihopoulos who heads Greek Prime Minister Alexis Tsipras’ office, said in a tweet that the report “is completely denied.”

Greece hopes enough progress will be made at Saturday’s finance ministers meeting to allow EU government leaders on Sunday to formally back a bailout program. The summit of the European Union’s 28 leaders has been billed as Greece’s last chance.

The eurozone ministers have to give their blessing to Greece’s bailout request to the European Stability Mechanism. Traditionally, eurozone ministers agree by mutual consensus. The task facing the new Greek finance minister, Euclid Tsakalotos, is to convince his skeptical counterparts that Greece deserves another bailout, which would be its third in five years.

Greece has received bailouts totaling 240 billion euros in return for deep spending cuts, tax increases and reforms from successive governments. Though the country’s annual budget deficit has come down dramatically, Greece’s debt burden has increased as the economy has shrunk by a quarter.

The Greek government has made some form of debt relief a key priority and will hope that a comprehensive solution will involve European creditors at least agreeing to delayed repayments or lower interest rates.

French Finance Minister Michel Sapin said Europe wants to hear the nitty-gritty around Greece’s proposals: “How are you going to do it? At what moment are you doing to do it? At what tempo are you going to do it.”

 

SportsPlus

Mower County

Soil-health incentive deadlines coming up

News

Bird flu worries prompt changes to popular ‘Miracle of Birth Center’ at Minnesota State Fair

Agriculture

Youth showcase a year of 4-H learning at Mower County Fair

Mower County

Lawhead joines Smith office as press aid

Mower County

In your Community: Duplicate Bridge

Mower County

In Your Community: Mower County Senior Center

Education

Education: Accolades

Columnists

Tim Penny: Open grants support welcoming communities

News

US economic growth increased last quarter to a healthy 2.8% annual rate

News

World War II sergeant whose plane was shot down over Germany honored with reburial

News

Gizmo the dog went missing in Las Vegas in 2015. He’s been found alive after 9 years

Blooming Prairie

Blooming Prairie man pleads guilty to federal charge of child pornography

Mower County

Westbound I-90 overnight detour at Hwy 105 scheduled July 29 in Austin

Crime, Courts & Emergencies

Darin Douglas Finley, convicted in the death of Melissa Rack, in jail on probation violation

News

Arson attacks paralyze French high-speed rail network hours before start of Olympics

Business

Hormel named to Forbes List of America’s Best Employers for Women 2024

Agriculture

Strip-till farming focus of upcoming event

Crime, Courts & Emergencies

Man gets 13 years in prison for criminal sexual conduct with a child

News

Biden delivers solemn call to defend democracy as he lays out his reasons for quitting race

News

In fiery speech to Congress, Netanyahu vows ‘total victory’ in Gaza and denounces U.S. protesters

Education

APS announces new cell phone, device rules for upcoming school year

Crime, Courts & Emergencies

Minnesota appeals court upholds – in part – original Heggs conviction

Crime, Courts & Emergencies

Austin teen injured in Tuesday night crash

Mower County

Gertrude Ellis travels the subject of next Lunchbox History event